After all the controversy over the public option, people might think that everyone can sign up right away if Congress passes health reform. Or that insurance premiums will go down. Or that they’ll be able to shop around for insurance if they don’t like what their company offers. Think again. When it comes to the public option, for instance, only about 1 in 10 Americans will be eligible, mainly people who don’t get insurance through work. Only about 6 million are expected to enroll. The plan doesn’t even start until 2013. And most people who get insurance on the job would have to stick with it. No shopping in the new “insurance exchanges” for them. President Barack Obama and Democrats in Congress stand to reap the political rewards if they can pull off health reform, by achieving near-universal coverage, toughening regulations on private insurers and transforming the way health care is delivered. But Democrats have glossed over nagging details of just how limited reform’s reach would be for some Americans. And if voters figure it out, experts warn there could be a political backlash. “These things can be enormously popular early on,” said Robert Blendon, a Harvard University health policy professor and co-director of a polling project by the Kaiser Family Foundation. “But if the expectations are wrong, then they start to become much less popular.” Other hidden problems lurk in the plan. Cutting costs relies on everyone owning insurance, but penalties in the Senate Finance Committee bill to force compliance are weak. Skip the fine, and all you’re asked to do is to one day pay up. A so-called millionaires tax in the House bill could eventually snare more and more families. If the bill becomes law, Blendon said, the campaign for maintaining support for health care reform would only just begin. “It is not really over in people’s mind,” he said. Here is POLITICO’s list of the biggest land mines in the bill: Public option — not for everyone The debate has placed disproportionate emphasis on the creation of a government insurance plan, raising the expectation that everyone could ditch their employer-provided coverage and enroll in the public option. But that won’t happen, at least not at the start. The reality is that only about 30 million Americans — 10 percent of the population — would even be eligible. “People think they are going to get it — and they aren’t,” said Sen. Ron Wyden (D-Ore.), who has pushed for changes to provide consumers with more choices. “That’s what they’re going to flip out about.” The public option could be accessed only through a new insurance marketplace known as an exchange, where consumers would shop for plans. Only certain categories of people could use the exchange: the self-employed, small businesses, lower-income people who qualify for tax credits to purchase insurance and those who are otherwise unable to find affordable private coverage.

That means the vast majority of Americans — about 170 million — who get insurance through their employers won’t have any new coverage options, say analyses by the Congressional Budget Office and the Centers for Medicare and Medicaid Services actuary. It’s a byproduct of Obama’s desire to preserve the employer-based insurance system and not shock the system with too much change, too quickly. Wyden sees a different problem. “Folks are going to say what did you all do in health reform to give me some chances to get more affordable coverage?” Fines? What fines? The Democratic version of health reform only works if there’s a steady stream of new customers, so insurance companies can spread out the costs and trim premiums for all. That’s why there is an “individual mandate” to buy insurance, with penalties to ensure compliance. But the fine for not buying insurance? Zero in the first year, 2013, in the Senate Finance Committee bill. The fine tops out at $750 in 2017, but there’s no real enforcement mechanism. And compared with the cost of owning insurance, that’s a pittance. For example, a 25-year-old who earns $30,000 a year could pay as much as $2,500 in annual premiums under the Senate Finance bill, according to a calculator on the Kaiser Family Foundation website. A family of four earning $70,000 could be looking at $8,400 in premiums. There’s an added twist. Even if families don’t have insurance, they can get it if someone gets sick — because of new prohibitions that would bar companies from denying coverage over a pre-existing condition. About 18 million people would choose to pay the fines rather than fork over thousands for insurance, according to a CMS study of the House bill. Premiums could still go up for most Americans The bills aim to place downward pressure on the rise in overall health care spending, which would translate into lower premiums. But a stew of proposed changes to the insurance market, new taxes on industry, and projected savings that may or may not materialize create a sense of uncertainty — or downright pessimism among Republicans — about how much the average family would save. Insurance industry studies concluded the bill would cause premiums to rise. Administration officials are confident savings would materialize for people across the board. But lawmakers are waiting to hear from the nonpartisan CBO, which is examining the impact on premiums. Grandma and Grandpa could lose out — and they vote Obama insists congressional proposals to trim more than $400 billion out of the Medicare system would tackle only wasteful spending. But the new CMS report on the House bill offered some dire warnings. The proposed cuts could prove so onerous to hospitals and nursing homes that they stop taking Medicare patients. Congress could dial back the cuts, but such a move would diminish the savings promised under the bill.

And as the government reduces rebates to Medicare Advantage, a program that allows seniors to buy Medicare coverage through private insurers, enrollment would plunge by 64 percent. Nancy-Ann DeParle, director of the White House Office of Health Reform, told POLITICO on Sunday that the 1997 Balanced Budget Amendment prescribed even more Medicare cuts, but “there was not what I would call a disruption in service to beneficiaries.”

“It is pretty speculative,” said DeParle, who headed the predecessor agency to CMS in the 1990s. Young vs. old in the bill One feature of the plan is designed to make sure insurance companies don’t sock older Americans with higher premiums — so lawmakers put
in provisions that limit the differences in costs between young and old. The House bill prevents insurers from charging older customers more than twice what younger people pay. The Senate Finance bill allows a 4-to-1 differential. Insurers argue that limiting the differential means they will have to cover costs by raising premiums on younger people — because older people are so much more expensive to cover. That could prevent younger people, who make up a large portion of the uninsured, from buying insurance at all. But allowing insurers to continue charging seniors six or seven times more, as the industry typically does now, creates another political headache for Democrats by possibly enraging seniors. “It’s very difficult for someone to describe themselves as a champion for older Americans … when at the same time they’re willing to support blatantly discriminatory practices based on age,” said Jim Dau, a spokesman for AARP, which wants age ratings abolished or the differential capped at no more than 2 to 1. Get ready for AMT, Part II? Back in 1969, when reports of the super-rich paying zero in taxes were rampant, Congress created the alternative minimum tax to make sure the wealthy paid its share. One small problem: Congress didn’t link the tax to inflation, so now the “super-rich” getting hit with the AMT includes a lot of middle-class homeowners, 30 million in all next year. A similar scenario might unfold with the millionaires tax in the House bill, on couples earning $1 million a year. Lawmakers didn’t index the tax for inflation, eventually imposing new costs on a growing number of families in the future. House Democrats were worried the tax on the wealthy wouldn’t keep pace with the government’s increased spending on health care costs — with good reason. One study by experts commissioned by the Peter G. Peterson Foundation recently predicted the House bill would add more than $1 trillion to the deficit over the next 20 years. But without indexing the tax, they’re leaving behind a ticking time bomb in the bill. Better be patient: The major benefits wouldn’t kick in until 2013 As a candidate, Obama vowed to cover every American by the end of his first term. But if he seeks reelection in 2012, the major reforms would only be getting started — and people who expected immediate relief could be left wanting. “People would just normally expect when you pass a law, it would go into effect,” Blendon said. “After a year, people are going to say where is this bill, where is the relief I was promised?” Patrick O’Connor contributed to this story.